CAIRO: By the time Egypt’s rice export ban is over, it will have lasted at least three times longer than was first announced.
This week, the Ministry of Trade and Industry announced its ban on all types of rice will expire in October. The ministry last month said it would extend the ban, which was enacted in March 2008, but had not set a date. It was the ministry’s second extension.
“This move is part of our efforts to ensure that the supply needed by the domestic market is completely met, Minister of Trade and Industry Rachid Mohamed Rachid said in a statement.
“The purpose of this export ban was to ensure that there was no distortion in the price of rice in the Egyptian market due to patterns in the international market. This stabilization has not yet been achieved, he added.
Sellers who import rice for the General Authority for Supply Commodities, a body involved with the state’s ration card system, will be allowed to export the same amount that they provide to the state, though they will have to pay an export fee of LE 1,000 per ton, which the state recently raised from LE 300 per ton.
The state originally set the ban to last from April 2008 to October of that year. Vietnam, India and other rice suppliers put similar bans or restrictions in place around the same time, as they attempted to allay domestic food inflation, which plagued many developing nations throughout the first half of last year.
Urban headline inflation hit 23.7 percent last August, as food inflation rose from 8.6 percent in December 2007 to 30.9 percent, according to statistics provided by investment bank Beltone Financial.
Worldwide food prices have subsided as the economic crisis has spread and most countries have removed or eased their bans. The persistence of Egypt’s ban is a sign that rice prices are still unusually high here.
This problem has continued despite Egypt’s abundant domestic rice production. In recent years, Egypt has grown about 4.6 million tons of white rice annually, and consumed about 3.2 million tons. This leaves 1.4 million tons for export, placing Egypt among the world’s most active rice exporters.
The high prices could be lingering due to hoarding among merchants who expect prices to keep rising, unexpectedly high demand, lax enforcement of the ban, or some combination of these factors, according to analysts.
Though Egypt has embarked on a series of generally pro-market reforms over the past five years, as with many countries it has enacted protectionist measures since the financial crisis deepened.
“Our policy has been to minimize government interference in the market, provided that the patterns of supply and demand are not distorted by the international prices and local suppliers, Rachid said in his statement.